Turbulent days ahead Local technology firms receive mixed forecast
By SUSAN TAYLOR -- Ottawa Sun
An insatiable demand for digital information is sending out
shockwaves and rattling business to its foundations.
The latest predictions from PricewaterhouseCoopers' 10th
Technology Forecast touch every sector of this region's hi-tech
industry -- but shifts in the telecommunications trade will have the
most dramatic impact.
The explosive growth in data traffic will continue and overtake
voice traffic by 2001 or 2002, said Terry Retter, a consultant in
PricewaterhouseCoopers' Technology Centre in California.
The shift in network traffic is driving huge demand for gear that
carries digital data.
'SUPERCARRIERS'
The expanding market, in turn, means takeovers and
consolidation in the telco sector. "The big guys are getting bigger
and the little guys have to get faster and meaner," Retter said.
Just four or five "supercarriers" will serve the market in 2002,
researchers predict, with up to 4,000 national and regional niche
players.
The odds aren't good for this region's telco giants -- Nortel and
Newbridge -- to emerge on top, said Retter.
"I don't think there's going to be a dominant Canadian player,"
he said.
SECOND FIDDLE
In massive markets such as China, which is just now starting to
lay communication pipes, area firms may play second fiddle, he
said.
Despite that, Nortel yesterday announced it's making major
inroads in that market since its first equipment sale in 1972.
During a visit from Chinese premier Zhu Rongji yesterday,
Nortel chief executive John Roth announced deals worth $60
million US to expand two digital wireless networks.
Roth also announced investments of more than $30 million US
into joint venture Guandong Nortel to locally manufacture
wireless gear for the Chinese market.
Retter said the region's software firms may face an easier market
with the blistering demand expected to mushroom for electronic
commerce tools. E-commerce is predicted to be a multi-trillion
trade in three years, with business doubling every 120 to 160
days.
That's good news for companies such as Corel Corp., which
pins part of its revenue growth on the Web.
What's bad news is that Linux, another Corel growth hopeful,
isn't expected to flourish, Retter said.
Unless a company adopts the operating system and offers
support services, corporations aren't likely to use the system.
"That's the potential weak link in the chain."
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